why would an economist use real gdp

Unemployment From where do the statistics come? The following is from: Many people think that the unemployment rate is a measure of who is receiving an unemployment insurance check, in fact, it includes many more people than that. Because unemployment insurance records relate only to persons who have applied for such benefits, and since it is impractical to actually count every unemployed person each month, the Government conducts a monthly sample survey called the Current Population Survey (CPS) to measure the extent of unemployment in the country. The CPS has been conducted in the United States every month since 1940 when it began as a Work Projects Administration project. It has been expanded and modified several times since then. As explained later, the CPS estimates, beginning in 1994, reflect the results of a major redesign of the survey. In September of 2000, the US unemployment rate was 3. 9% Unemployment rate, US, 1999-2009 What is Unemployment? If the unemployment rate is 3. 9%, then 3. 9% OF WHAT are unemployed?

It is NOT 3. 9% of the population, but rather 3. 9% of the LABOR FORCE. What is the labor force? From People with jobs are employed and they are in the labor force. People who are jobless, looking for jobs, and available for work are unemployed and they are also in the labor force. People who are neither employed nor unemployed are not in the labor force. About half of the US population is in the labor force. Who is counted as employed? From Not all of the wide range of job situations in the American economy fit neatly into a given category. For example, people are considered employed if they did any work at all for pay or profit during the survey week. This includes all part-time and temporary work, as well as regular full-time year-round employment. Persons also are counted as employed if they have a job at which they did not work during the survey week because they were: Basically anyone who works at least one hour a week for pay is EMPLOYED. Who is counted as unemployed?

From Persons are classified as unemployed if they do not have a job, have actively looked for work in the prior 4 weeks, and are currently available for work. UNEMPLOYED then is anybody who is NOT WORKING, BUT LOOKING. Who is in the labor force? The "labor force include those who are employed plus those who are unemployed. Who is not in the labor force? From All members of the civilian noninstitutional population are eligible for inclusion in the labor force, and those 16 and over who have a job or are actively looking for one are classified as in the labor force. All others--those who have no job and are not looking for one--are counted as "not in the labor force. " Many who do not participate in the labor force are going to school or are retired. Family responsibilities keep others out of the labor force. Still others have a physical or mental disability which prevents them from participating in labor force activities. people who may be working but illegally (e. g. drug dealers) discouraged workers - people who may have had a job and were employed, they lost their jobs and looked for another and were then unemployed, and then they gave up looking so now they are not in the labor force anymore.

Using the exchange rate to convert GDP from one currency to another is straightforward. Say that the task is to compare Brazils GDP in 2013 of 4. 8 trillion reals with the U. S. GDP of $16. 6 trillion for the same year. Step 1. Determine the exchange rate for the specified year. In 2013, the exchange rate was 2. 230 reals = $1. (These numbers are realistic, but rounded off to simplify the calculations. ) Step 2. Convert Brazils GDP into U. S. dollars: Step 3. Compare this value to the GDP in the United States in the same year. The U. S. GDP was $16. 6 trillion in 2013, which is nearly eight times that of GDP in Brazil in 2012. Step 4. View which shows the size of and variety of GDPs of different countries in 2013, all expressed in U. S. dollars. Each is calculated using the process explained above.